The Best Vanguard Funds for 401(k) Retirement Savers

Vanguard funds are the most beloved offerings in 401(k) plans, and it's not even close. Thirty-three of its funds rank among the 100 most popular funds in employer-sponsored retirement plans in the country, according to information from BrightScope, a financial data firm that rates 401(k) plans.

Many of the best Vanguard funds make this list, but here's what the full breakdown of options looks like:

14 are low-cost index funds that track a broad market benchmark (more on those later).10 are Vanguard Target Retirement funds, those one-stop funds for investors who want and need help investing their retirement savings. 9 are actively managed funds, including some of the most iconic offerings in Vanguard's arsenal.

As part of our annual review of the most popular 401(k) funds in the country, we're reviewing both Vanguard's actively managed and target-date funds. We have rated each fund Buy, Sell or Hold, and this year includes some upgrades and even a rare downgrade.

But first, a quick word about Vanguard's index funds. These types of low-cost investments are built to perform in line with a broad index. And Vanguard's "Total" fund suite – Total Stock Market (VTSMX), Total International Stock (VTIAX) and Total Bond Market (VBTLX) – are among the biggest index funds in the country. Generally, these funds do what they're geared to do, and we recommend them fully.

But two index funds on the list require a word of caution, namely Vanguard Growth Index (VIGAX, #48 in the ranking) and Vanguard Value Index (VVIAX, #68). These funds slice the universe of U.S. companies a little finer than Vanguard 500 Index, which holds the 500-odd stocks in the S&P 500-stock index. There's nothing wrong with concentrating on growth or value stocks. But it's worth remembering that these funds can be more volatile than the broad stock market at times, and perform differently (sometimes better, sometimes not) than the broad market, too.

Now, let's look at some of the best Vanguard funds for your 401(k) plan … and weed out a few lesser options, too.

SEE MORE The 25 Best Low-Fee Mutual Funds to Buy in 2020 Returns and data are as of Sept. 25, unless otherwise note

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Stock Market Today: Stocks Slip Ahead of Trump-Biden Tilt

Traders showed a little timidity in a weak Tuesday session preceding the first presidential debate.

House Democrats unveiled a new COVID rescue package that includes another round of stimulus checks and would revive the "bonus" $600 weekly unemployment benefit – and at a slimmed price tag of $2.2 trillion, from $3.4 trillion previously. While Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin were scheduled to talk later tonight, experts still gave the bill little chance of passage in the GOP-controlled Senate.

SEE MORE Hedge Funds' 25 Top Blue-Chip Stocks to Buy Now

Also Tuesday, a Case-Shiller index showed continued strength in the housing market – home prices rose 4.8% nationally in July, versus a 4.3% gain in June.

Nonetheless, stocks lost a little ground, with the Dow Jones Industrial Average sliding 0.5% to 27,452.

Other action in the stock market today:

The S&P 500 declined 0.5% to 3,335.The Nasdaq Composite dipped 0.3% to 11,085. The small-cap Russell 2000 lost 0.4% to 1,504. What Tonight's Debates Mean for Stocks

Investors might have been looking ahead – whether out to later this week, when we get the next round of weekly unemployment data (Thursday) and September's jobs report (Friday), or to later tonight, when President Donald Trump and former Vice President Joe Biden face off.

SEE MORE 13 Best Warren Buffett Growth Stocks

What should investors expect out of tonight's debate? Well, if past is precedent, Tuesday night's verbal round of sparring likely won't provide an accurate signal of who will win the election or what stocks will do until then, says LPL Financial Chief Market Strategist Ryan Detrick. But, he adds, "2020 is unlike any year we've ever seen before, so we could be one Howard Dean gaffe or Ronald Reagan zinger away from a major sway in this election."

Wall Street seems to have a much clearer picture of which areas of the market should benefit from a Trump or Biden win, however.

For instance, a Biden win could give new life to these 10 stocks, which include "green" companies and infrastructure plays. Conversely, if Donald Trump is re-elected, experts like the prospects for the financial and

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Tax Moves to Make Now If You Think Biden Will Be President

After a period of historically low tax rates and an exploding national debt, an era of higher taxation could arrive with a Joe Biden presidency next year, or with another progressive in five years. How does this potential change affect those entering or near retirement?  Perhaps not favorably: You will be on a fixed income, but your taxes could increase, creating an additional drag on your retirement funds. 

These same higher taxes could have a potentially negative impact on stock and dividend growth.  Heavy-handed taxes at the corporate level could result in a dramatic slowing in GDP and spur multinational companies to leave our shores for a more favorable tax environment. 

Biden’s proposals could just the beginning.  His first steps, as outlined in his tax plan, could be the end of historically low taxes for all of us. In other words, you may never again pay as little in taxes as you are today. Taxes are truly on sale right now. 

The good news is there are things you can do.  You don’t have to be a victim of potential tax hikes.  But you may need to take action sooner rather than later. 

So, let’s take a look at some current proposals from Biden. As you read, keep in mind that it’s Congress — not the president — that has the power to determine what happens to taxes. Presidents can recommend changes to tax laws, but only Congress can make the changes. With that said, let’s look at where we may be headed and then talk about what you can do about it.

1. Proposal: Higher tax rates for the wealthiest Americans

Although low- and middle-income earners would get some breaks under Biden’s plan, he proposes to roll back the Trump tax rates to the pre-Trump era on those earning $400,000 or more.  That means the top tax bracket will go up from 37%  to 39.6%.    

While that change would be incremental and only affect America’s highest earners, a bigger change is coming regardless of who wins the White House, and it could affect us all. In 2025, if no action is taken, the Tax Cuts and Jobs Act will “sunset,” meaning all tax brackets will go back up to the higher rates that existed prior to the Trump tax package.  This increase will happen automatically on Jan. 1, 2026, simply by the Congress doing nothing.

2. Proposa

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How Will Stocks React to the 2020 Presidential Debates?

Investors worried about how Tuesday night's presidential debate between President Donald Trump and former Vice President Joe Biden will affect the stock market can rest easy.

If history is any guide, the market won't care what happens either way.

Presidential Debates Leave Few Bread Crumbs to Follow

As LPL Financial – registered investment advisor and broker-dealer – notes, the data from past debates going as far back as 1960 don't offer a clue as to how stocks react to the first debate, to say nothing of indicating which party might win.

SEE MORE 10 Best Stocks to Buy If Joe Biden Wins the Presidency

"Could stocks give a clue who will win the election based on how they do after the debate?" writes LPL Financial Chief Market Strategist Ryan Detrick. "Unfortunately, it doesn't appear to give any hints, as returns and winners are all over the place.

"Still, 2020 is unlike any year we've ever seen before, so we could be one Howard Dean gaffe or Ronald Reagan zinger away from a major sway in this election."

SEE MORE 10 Best Stocks to Buy If President Donald Trump Wins Re-Election

To get a sense of how pointless it is to look to the presidential debate for trading insights, check out LPL's "Chart of the Day" and consider just a few of the numbers:

The odds of the market rising or falling in the session ahead are aren't far off from 50-50.There have been 12 first presidential debates since 1960. On average, the S&P 500 retreats 0.3% the next day. The median performance, however, is a gain of 0.4% for the broad market index. Neither of those outcomes are material. The days and weeks after the debate don't tell us anything useful either. Five days out, the market is higher 50% of the time. As for a month after the debate, again, stocks are positive 50% of the time. On average, stocks lose 0.9%, 1.8% and 2% in the five days, 10 days and one month following the debate, respectively. However, the median return is positive for all of these time frames, albeit at only fractions of a percent. Again, these returns are essentially immaterial. The data are skewed by the 2008 market meltdown.

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What to Know About the Tax Extension Deadline on October 15 (Ep. 46 Rebroadcast)

Ryan Ermey: Hi, folks. In case you missed it, last week's show episode 96 was my last episode as host of Your Money's Worth. But that doesn't mean the show is coming to an end. Replacing me is new co-host, senior online editor David Muhlbaum. Say hello to the people, Dave.

David Muhlbaum: Hello, all you beautiful people. Well, these are some pretty big shoes I'm stepping into. Ryan has done a spectacular job of connecting you -- our listeners -- with both the insights of our reporting and the people who do it. Not to mention the guests. I'm going to do my best to continue his work and look for Sandy and me to talk about the fall travel season next week. 

Ryan Ermey: In the meantime, please enjoy this rerun of episode 46 of the show, which features among other things a discussion of how to winterize your car and an impressive Jeopardy performance from Dave.

David Muhlbaum: Yeah. Thank you. Well, this item holds up pretty well a year later. I know in small part, because, well, winter is coming again. It might not seem that way for everyone, but it snowed in the Rockies last week -- just days after Labor Day. So it's time to check things.

Ryan Ermey: Enjoy, folks.

Read the transcript below.

Ryan Ermey: Tax day is next week -- if you filed for an extension, that is. tax editor Rocky Mengle joins the show to break down the rules around extensions and what you need to know before filing in our main segment. On today's show, Kiplinger car guru David Muhlbaum fills in for Sandy for a discussion on preparing your car and home for winter. And we crack into another category's worth of financial Jeopardy questions. That's all ahead on this episode of Your Money's Worth. Stick around.

Episode Length: 00:29:42Links and resources mentioned in this episode SUBSCRIBE: Apple Google Play Spotify Overcast RSS

Ryan Ermey: Welcome to Your Money's Worth. I'm Kiplinger's associate editor Ryan Ermey and Sandy Block is not with us today, but our friend David Muhlbaum, who's been on the show a few times is ably filling in. David, thank you for coming on.

David Muhlbau

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